From day to day, it’s hard to notice the population of the city or metro area around you growing. Changes in density and the amount of traffic can be subtle, but it’s not until you recall vacant blocks or easy commute days from years past that you actually realize the difference.
Of course, it may be more noticeable when the net number of people moving to your area equates to more than 100 a day, like it does in Austin, Texas. It’s not just the traffic patterns that change — it’s also the steep increase in rent when you renew your lease or the jump in property taxes on the house you own due to rising values in the area.
As part of the 2019 Best Places to Live ranking, U.S. News calculated the cost of living for the 125 most populous metro areas in the U.S., comparing the median annual household income to the median mortgage or rent payment, plus property taxes for the portion of households that are occupied by their owners. Additionally, population growth due to net migration was factored in with U.S. Census Bureau data, based on the number of people moving into and out of each metro area over the five-year period from 2013 to 2017.
A rapidly growing population can limit resources, however, particularly with housing. Our analysis found that parts of the country seeing some of the fastest growth in population due to net migration struggle to keep the area affordable, particularly for those who already live there. While the current cost of living can be a deciding factor in moving to a new place, there’s also value in looking at what the cost of living could look like in a few years. If housing costs are rising fast, keep an eye on what local government and organizations are doing to keep rents and home prices from pricing out the local population.
Here’s the impact on three metro areas seeing rapid population growth due to net migration:
Best Places 2019 Rank: 1
Metro Population: 2,000,590
Median Home Price: $292,500
Median Annual Salary: $51,840
Net Migration 2013-2017: 10.09%
The capital of Texas has seen rapid growth as it continues to cement its role as a key tech hub. From positions at new startups to well-known companies like Apple and Google, Austin’s job opportunities draw plenty of young professionals from pricier parts of the country. The rapid increase in population and influx of jobs with higher income, however, has led to a rise in the cost of living that longtime locals struggle to afford.
Best Places 2019 Rank: 18
Metro Population: 768,381
Median Home Price: $237,260
Median Annual Salary: $42,680
Net Migration 2013-2017: 13.1%
Florida is the third-most populated state in the U.S., with more than 21.3 million residents as of 2018, and also one of the fastest-growing. Sarasota, sitting on the Gulf Coast, is a popular vacation destination and an even bigger hot spot for retirees to relocate. Sarasota climbed 16 spots in the Best Places to Live in 2019 ranking, with slight score increases in multiple categories, including affordability. But the metro area saw a particularly significant jump in desirability, based on a series of SurveyMonkey surveys asking residents throughout the U.S. where they would prefer to live. Sarasota-area residents spend 25.51% of the median household income on housing.
Best Places 2019 Rank: 75
Metro Population: 432,772
Median Home Price: $181,800
Median Annual Salary: $35,890
Net Migration 2013-2017: 17.41%
The metro area surrounding this South Carolina resort town is the fastest-growing out of the 125 metro areas on the list. Myrtle Beach has a smaller population than most other places on the list, with less than 500,000 people calling the area home, but it also saw 17.41% population growth due to net migration between 2013 and 2017.
Who’s Moving In and Who’s Getting Priced Out?
In Austin, where many moves to the area are motivated by jobs, especially tech jobs, rising home prices aren’t just driven by increased demand. Kevin P. Scanlan, the 2019 Austin Board of Realtors president, explains that because many transplants to the area come from pricey coastal metro areas, they’re more than happy to pay higher than the median price for a house or rent. “They come out here and they have reverse sticker shock,” Scanlan says. “They can’t believe the amount of house you can get here for the price.”
While it’s cheaper than California or New England, the cost of living is certainly going up. Scanlan notes that the Austin area’s aging population and longtime residents are among those most negatively affected by the change, with people who own their homes even being priced out of their neighborhoods because property taxes are increasing beyond their means.
Population influx isn’t solely based on jobs. Amy Bogan, assistant director of the Myrtle Beach Housing Authority, notes that not only is there a large number of locals seeking housing assistance in the Myrtle Beach area, but people are also looking to relocate to the area if they can secure housing assistance.
“We continue to see an increase in inquiries and need as Myrtle Beach population continues to increase,” Bogan wrote in an email. “We recently opened our Housing Choice Voucher waiting list and took in 4,600 applications in a matter of 48 hours. That alone shows a need. Of the 4,600 applications 2,200 applicants were from (South Carolina) and 2,400 were from other states and Puerto Rico.”
Where Are the Solutions?
Population growth shouldn’t be seen as a bad thing, especially when housing manages to grow with the rise in new residents. In Sarasota, development and a continuously growing population are working hand in hand. “Our current market is fueled by transplants to Sarasota County,” wrote Amy Worth, 2019 president of the Realtor Association of Sarasota and Manatee, in an email. “As population grows, so does our housing market. We’ve seen a rise in new condo developments in recent years and in 2018, the Sarasota condo market reached a new sales record.”
An expanding job market is also a key factor in keeping residents in housing they can afford, Bogan says. Of the Myrtle Beach area, she says, “The increase in (jobs for) medical, education and the service industry increases incomes opening more families up to homeownership, in turn opening up more rental units.”
Development of midlevel and affordable housing will also help keep housing costs lower for those who need it, rather than forcing them to move or spend a larger share of their income on rent or mortgage payments and property taxes. Bogan notes the Myrtle Beach Housing Authority recently completed construction on an apartment complex for homeless disabled veterans in need of assistance, while also working with other housing complexes and landlords to help them meet required code to accept tenants with housing vouchers.
Additional efforts by local or state governments are likely to help. Scanlan says the city of Austin has been working to propose legislation for more affordable housing, though no official plans have been approved yet.
[Read: How to Find a Real Estate Agent]
Know Before You Move
Regardless of the cost of living, a move to a rapidly growing metro area may be inevitable. You should still be able to find plenty of housing options in your budget, but it’s a matter of managing your expectations. And the best way to accomplish that may be to, as Bogan notes, “plan, plan, plan.” Expect to have to move quickly to apply for an apartment or to put in an offer on a house, because plenty of others are active on the market. Research rents and home prices in different neighborhoods in advance, as you may find you have to widen the area you’re looking to live in to fit your budget.
In Austin, to afford a home for $300,000 or slightly below, where the median falls, don’t expect to live downtown. “You’re probably going to be more like 30 minutes from the downtown area,” Scanlan says.
The upshot in Austin, according to Scanlan, is that many of the new tech company buildings and facilities are also being built outside the city center. “These companies are building their campuses inside of those new suburban corridors,” he says, and with the new office space come restaurants, entertainment and housing options that would be more convenient than living downtown and commuting out of the city every day.
Once you’re living in your new hometown, it can also be to your advantage to keep an eye on not just your own cost of living, but the rental rates and home prices nearby. You may find you want to move to a nearby suburb after a year for lower rent, or you may find you want to buy a property in a neighborhood that’s rising in value.
New construction can also help your cost of living going forward. In Sarasota, Worth expects demand to remain steady or even ease up as more properties are built. “As our current supply of homes starts to rise, our market will become more balanced, keeping the median sales price from rising too far above an ‘affordable’ threshold,” she says.
A move to a place in the midst of a population boom can get expensive, but with the right planning and research, you should be able to live within your means. And while the cost of living may continue to increase for some time, expect competition for housing to ease eventually, either through a slowing in population growth or more housing development. Of course, you’re one of many moving the area, so while cost can be a concern, there are likely plenty of other benefits that can make your new hometown the right move, be it a new job, great weather or proximity to friends and family.
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These Metro Areas Are Growing Fast, But the Cost of Living May Not Be Affordable originally appeared on usnews.com